Research On Human Resource Misallocation In China

Based on the theoretical framework of Brandt,Tombe and Zhu(2013),extending the production ffunction to include low skilled labor and high skilled labor in Cobb-Douglas production function,this paper calculates the degree of resource misallocation between state-owned units and non state-owned units and between provinces from 1993-2012 in China,the path of their evolution,and analyzes the specific reasons leading to the misallocation of human resources and measures to tackle this problem.Empirical results show that,the degree of overall resource misallocation in China declined after 2000,especially in 2000-2007,significantly improving the efficiency of resource allocation,which is dominated by the improvement of capital allocation efficiency between state-owned units and non state-owned units.In 1997-2003,there had been a slight increase in the degree of resource misallocation between provinces,and a slight decrease after 2004,which is mainly reflected by the change of allocation efficiency of low skilled labor and high skilled labor between provinces.The degree of capital and low skilled labor misallocation is high,and the degree of high skilled labor misallocation is low.The contribution of capital misallocation between provinces to the overall capital misallocation is increasing.The misallocation of low skilled labor is generally reflected by the misallocation between provinces.After the 2001,the misallocation of high skilled labor is generally reflected by the misallocation between provinces.In 1996-2004,the allocation efficiency of high-skilled labor between state-owned and non-state-owned units increased significantly,and no notable change after 2005.In 1996-2001,the allocation efficiency of high-skilled labor between provinces declined slightly,but increased gradually after 2002.Both the reform of state-owned enterprises and opening up to the outside world are the main reasons for the improvement of allocation efficiency of human resources between state-owned and non-state-owned units.The main reasons for the deterioration of the allocation efficiency of human resources in China includes the policy of pursuing the regional overall GDP balance,market segmentation and Hukou system.In order to improve the allocation efficiency of human resources,government should gradually eliminate the market barriers caused by administrative monopoly,improve the production efficiency of state-owned enterprises by promoting the market-oriented reform,push forward market-oriented reform in the financial system to solve the financing constraints of private enterprises,transform the development strategy from pursuing the regional overall GDP balance to pursuing the regional per capita income convergence,abolish Hukou system and break local protectionism and market segmentation by adopting official performance appraisal standards that can more fully reflect the quality of regional economic and social development.